Asian Stocks Post Biggest Decline in More Than Six Weeks

By Jonathan Burgos -
Aug 7, 2013

Asian stocks fell, with the regional
benchmark index posting its biggest drop since June 20, as
Japanese shares led declines across the region after the yen
gained for a fourth day and metals prices slid.

Pioneer Corp. (6773) sank 8.7 percent in Tokyo after the maker of
car stereos lowered its full-year profit forecast. BHP Billiton
Ltd., the world’s biggest mining company, dropped 2 percent in
Sydney as copper futures declined. The MSCI Asia Pacific Index
decreased 2 percent to 133.01 at 10:03 p.m. in Tokyo as more
than five shares dropped for every one that climbed.

Japan’s Nikkei 225 Stock Average tumbled the most in almost
two months at the close in Tokyo as the yen touched a six-week
high against the dollar. The U.S. trade deficit narrowed more
than forecast in June, the Commerce Department said yesterday,
driving the Standard & Poor’s 500 Index lower as investors
weighed whether the stronger data would encourage the Fed to
start reducing its monthly bond purchases.

“Markets are entering a period of uncertainty,” said Yoji Takeda, Hong Kong-based head of Asian equities at RBC Investment
(Asia) Ltd., which oversees $1.5 billion. “There’s a policy
vacuum in Japan and the government isn’t going to come up with
new policies until parliament resumes sessions in September.
While the possible tapering of U.S. stimulus has been more or
less priced in, people tend to be a little bit cautious until it
happens.”

The Bank of Japan will maintain its asset-purchasing
program at a two-day meeting that started today, according to
all 26 economists surveyed by Bloomberg.

The MSCI Asia Pacific Index advanced 1.3 percent last
month, its first such gain since April, after China pledged to
do more to support a transition from an export-based economy to
domestic demand.

Fed Bank of Chicago President Charles Evans, who has been
among the strongest proponents of record monetary easing, said
yesterday he “would clearly not rule” out a decision to begin
dialing back bond purchases in September. Economists at Goldman
Sachs Group Inc. and Barclays Plc raised their estimates for
second-quarter U.S. gross domestic product, citing the trade
data.

European Recovery

German factory orders increased by the most in eight months
and U.K. industrial production beat forecasts in June, adding to
evidence of a nascent recovery in Europe, separate reports
showed yesterday. Italy’s economic contraction slowed.

Hyundai Motor Co., South Korea’s largest carmaker,
decreased 3.2 percent to 225,000 won, while affiliate Kia Motors
Corp. fell 3.7 percent to 60,500 won after union negotiators
walked out of wage talks and said they would ask workers to vote
on a strike.